A must-see for businesses: How high are the hidden costs of using pseudo-environmentally friendly plastics?

Pseudo-environmentally friendly plastics are eating into corporate profits

        2024 A new McKinsey study shows that companies using pseudo-environmentally friendly plastics bear an average of 23% more in hidden costs each year, often hidden in the supply chain, brand reputation and legal risks.

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Part I: 3 types of high-risk pseudo-environmental plastics

1.1 Oxo-degradable plastics (Oxo-degradable)

False features:

Claims “12-24 months natural degradation”

Price is only 5-10% higher than traditional plastics

Actual hazards:

Produces micro-plastic pollution (banned by the EU legislation)

Faces fines of up to 4% of the annual turnover from 2024 onwards

1.2 Low-content starch blended plastics

Typical formulations:

30% starch + 70% PP/PE

Often labeled as “bio-based” “partially degradable”

Risks for companies:

Contamination of recycling streams (increase in sorting costs by $120/tonne)

Doubling of disposal fees due to refusal of composting sites

1.3 Off-standard industrial PLA

Nature of the problem:

Failure to comply with EN 13432 certification

Degradation requires specific conditions of temperature and humidity

Consequences of use:

Increase of 42% in customer complaints (Consumer Goods Association 2024) (Consumer Goods Association data, 2024)

Ineligible for government environmental subsidies

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Part II: 5 Hidden Costs in Detail

2.1 Surge in Compliance Costs (new regulations in 2024)

Region Penalty Standards for Violations Typical Cases

EU 4% of annual turnover or €20M A fast food chain was fined €8M in 2023

China Green Label revocation + $500K fine 3 mulch film makers were blacklisted in 2024

California USA $2,500 civil damages per product $12M in class action settlement in 2023 Lawsuit settlement $12 million

2.2 Supply chain cost increases

Comparison of measured data (per ton):

Cost items True eco-friendly plastics Pseudo eco-friendly plastics

Sorting labor $15 $80

Special handling $0 $150

Scrap rate 2% 15%

Source: Supply Chain Management Association Report 2024

2.3 Loss of brand value

Consumer research:

Pseudo eco-friendly incident led to 35% decline in brand reputation

Need to 2.7 times the marketing spend to recover

Typical example:

An apparel brand’s ESG rating was downgraded from AA to B and its share price fell 11% in one week due to the use of oxo-degradable packaging.

2.4 Missed Policy Dividends

Subsidies available in 2024:

EU Circular Economy Fund: up to 30% equipment renovation subsidy

China Comprehensive Utilization of Resources: 50% VAT refund on demand

US Cleaner Production: $200 per ton carbon tax credit

2.5 Accumulation of Litigation Risks

Typical Litigation Causes in 2024:

False Environmental Propaganda (52% of cases)

Microplastic Pollution (28%)

Destruction of Recycling Systems ( 20%)

Average settlement: $3.8 million/case

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Part III: Successful Case References

3.1 Transformation of FMCG Industry

An international beverage brand:

Elimination of oxo-degradable labels

Switching to PHA caps

Result: ESG rating improved, $1.2 million carbon tax rebate

3.2 E-commerce Packaging Innovation

A cross-border e-commerce company:

Replacement of EPS with mycelial cushioning material

15% increase in cost, but 28% decrease in customer complaint rate

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